Credit availability in the crisis: which role for the European Investment Bank Group?
AbstractIn this paper we consider a moral hazard problem between a creditworthy firm which needs funding and a bank. We first study under which conditions the firm does not obtain the loan. We then determine whether and how the intervention of an external financial institution can facilitate the access to credit. In particular, we focus on the European Investment Bank Group (EIBG), which provides (i) specific credit lines to help banks that finance small and medium-sized enterprises (SMEs)and (ii) guarantees for portfolios of SMEs'loans. We show that only during crises the EIBG intervention allows to totally overcome the credit crunch.
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Bibliographic InfoPaper provided by Dipartimento Scienze Economiche, Universita' di Bologna in its series Working Papers with number 699.
Date of creation: Mar 2010
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Other versions of this item:
- Alessandro Fedele & Andrea Mantovani & Francesco Liucci, 2010. "Credit Availability in the crisis: which role for the European Investment Bank Group?," Working Papers 1005, University of Brescia, Department of Economics.
- G01 - Financial Economics - - General - - - Financial Crises
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-04-04 (All new papers)
- NEP-BAN-2010-04-04 (Banking)
- NEP-BEC-2010-04-04 (Business Economics)
- NEP-CTA-2010-04-04 (Contract Theory & Applications)
- NEP-EEC-2010-04-04 (European Economics)
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